Friday, October 16, 2015

After pleading guilty to a mortgage fraud charge that was a small part of her husband's multi-million dollar looting of a Texas company, Lisa Scarfo, 36, was sentenced today to two years probation and 200 hours of community service.

"Mrs. Scarfo, good luck. I hope you get your life back together," U.S. District Court Judge Robert Kugler said after imposing the sentence during a 10-minute hearing in federal court in Camden.

Kugler cited her "limited role" in the scam orchestrated by her husband, mobster Nicodemo S. Scarfo. But the judge added that he did not doubt that she knew what she was doing when she filed false statements in a mortgage application in 2008 that allow the couple to purchase a $715,000 home in Egg Harbor Township outside of Atlantic City.
In a statement read by her attorney, Richard Sparaco, Lisa Scarfo apologized to the court. She said she had made a "serious mistake" that had "devastated her family" and she pleaded for leniency.

Assistant U.S. Attorney Steven D'Aguanno, the lead prosecutor in the eight-year investigation, said the government did not oppose probation. Under sentencing guidelines, Mrs. Scarfo faced a maximum prison sentence of six months, according to the judge.

Her husband and his top associate, Salvatore Pelullo, were each sentenced to 30 years in prison in July after a jury convicted then of masterminding the behind-the-scenes takeover of FirstPlus Financial Group in 2007 and then systematically looting the company of $12 million.

The money, the government alleged, was used to finance a lavish lifestyle that included the purchases of a $850,000 yacht, a corporate jet, a Bentley automobile, jewelry and the home in Atlantic County that was the focus of the mortgage fraud charge.

Prosecutors alleged that Scarfo, the son of jailed Philadelphia mob boss Nicodemo D. "Little Nicky" Scarfo, and Pelullo used fear, threats of violence and the aura of organized crime to remove officials who oppose their takeover and to intimidate others in the company to go along with the plan.

"Nicky Scarfo and his associates tried to take La Cosa Nostra corporate, using traditional strong-arm tactics to take over a publicly traded company and loot it like a personal piggy bank," said Assistant U.S. Attorney General Leslie R. Caldwell in a statement released after Scarfo was sentenced back in July.

"Scarfo and his crew gave new meaning to the term `corporate takeover,' pushing out the legitimate leadership of a publicly traded company and then looting it," added Paul Fishman, the U.S. Attorney for New Jersey whose office prosecuted the case.

Scarfo, Pelullo, FristPlus CEO John Maxwell and his brother William, an attorney who served as private counsel to the company, were convicted of racketeering conspiracy, bank fraud, mail fraud, securities fraud, extortion and money-laundering earlier this year. John Maxwell was sentenced to 10 years in prison. His brother got 20 years.

All four defendants are appealing.

Lisa Scarfo was one of several defendants who pleaded guilty prior to the start of the trial. She admitted filing a false tax return that exaggerated her income as part of an application for a $500,000 mortgage for the Egg Harbor Township home. The government alleged that a $215,000 down payment for that purchase came from the looting of FirstPlus.

The Scarfos were married on Feb. 14, 2008, while the FirstPlus scam was in full bloom. It was Nicodemo Scarfo's second marriage. The couple have a son, also named Nicodemo, who was born a few months later.

A probation officer, testifying at trial, said Nicodemo Scarfo boasted that his baby was "Nicodemo 3d." The boy, now about seven, is the namesake of two notorious mobsters.

His grandfather, one of the most violent mob bosses in Philadelphia history, is currently serving a 55-year term for racketeering and murder. The 84-year-old crime boss was named as an unindicted co-conspirator in the FirstPlus case. Authorities said both his son and Pelullo visited him in prison and discussed the conspiracy and their plans to take over the company.

Authorities opted not to formally charge the elder Scarfo, noting that he will likely die in prison. His probation date is 2033 when he will be 104 years old. His son, who has been in jail since his arrest in 2011, has two prior convictions for mob-related gambling and racketeering offenses. His earliest release date, absent a successful appeal, is in 2036.

Steven D'Aguanno, who spearheaded the FirstPlus probe, said after today's hearing that the government was satisfied with probation for Lisa Scarfo, acknowledging as the judge had done, that her role was a small one in the overarching conspiracy.

"It's been a long road," D'Aguanno said of the probe that began back in 2007, adding that his office was pleased with the convictions and sentences that have capped the case.

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